EAH to construct a new apartment hotel in Sandton - CNBC Africa

EAH to construct a new apartment hotel in Sandton

Southern Africa

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Empire EAH. PHOTO: EAH

“This is our sixth property. We’ve opened one hotel per year for the past six years and trading has never been better," Marc Wachsberger, managing director of EAH told CNBC Africa in an interview.

The hotel, 177 Empire Place, is situated next to Sandton City and will be fully operational in the first quarter of 2014. It comprises of 126 hotel and apartment rooms. The apartments are made up of three bedrooms, which can be divided into separate rooms.

Wachsberger explained that the strategy of constructing an apartment hotel was implemented in a way so that if the market took a slide, EAH will have the option to sell the building to the residential market.

“We actually made the call a year and a half ago to construct this hotel. We could see the market was turning and we also designed it to have a residential component, it’s an apartment hotel which means if we ever got it wrong, we could always sell it off to the residential market sectional title,” he said.

“It’s not looking like that’s the case, but that market is also looking very strong as well.”

Each room, which cost around 1 million rand to construct, will most likely be booked by corporate companies.

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Wachsberger stated that since South Africa suffers from a skills shortage, many corporate companies such as banks and telecommunications employ international experts on a part time basis to up skill their businesses.

“Our customers are mostly corporate companies that are bringing in international travellers,” he added.

“We have a skills shortage, a brain drain in this country. A lot of the skills aren’t there and we have to import the skills so we have to then accommodate and house them.”

He added that due to tight corporate budgets, their hotel room rates remain competitive compared to average hotels as they keep in line with the low cost airline model, as well as cut out some unnecessary services that you usually get at other hotels.

“The rates are more competitive than the average hotel, because we try to keep it almost in line with low cost airline model. We cut out a lot of the frills and unnecessariness that you would get at a hotel,” explained Wachsberger.

“Corporates today have serious budgets. We know what those budgets are and we tailor make our property rates to make sure we get a rate that are within corporate budgets.”

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